Review 5A: Taxes

Which of the following are two mandatory categories of government spending that are paid for by FICA taxes?

• Military and Education

• Health and Veterans’ Benefits

• Housing and Transportation

• Social Security and Medicare

On a pay stub, the amount of money that is left after withholdings is known as…

• Gross pay

• Net pay

• Annual earnings

• Wages and tips

Which statement best describes discretionary government spending?

• A fixed amount of money spent on the same categories every year

• The money used to pay for Social Security and Medicare

• A changing amount of money spent on different categories each year

• Money that you determine how it is spent by the government when you submit your taxes

How frequently does Hope receive a paycheck?

• Daily

• Weekly

• Twice per month

• Monthly

Assuming that Hope receives a paycheck at regular intervals similar to the stub shown, how many pay periods has Hope had year-to-date (YTD)?

• 2

• 3

• 8

• 9

Which statement below accurately describes Hope’s gross wages?

• Gross wages are calculated by multiplying Hope’s hourly rate by the number of hours she worked

• Gross wages are Hope’s fixed salary, which she receives for every pay period

• Gross wages are calculated by subtracting all of Hope’s deductions from her gross income

• Gross wages are how much Hope has earned over the course of the entire year

What was the largest deduction for this pay period?

• FICA Medicare Tax

• FICA Social Security Tax

• Federal Tax

• NC State Tax

Look at the lines that say HEALTH, DENTAL, and RETIREMENT. Which statement below is accurate?

• Those lines represent taxes that Hope paid to the Federal government

• Those lines represent taxes that Hope paid to the state government

• Those lines represent benefits that the employer is paying to Hope in addition to her wages

• Those lines represent insurance and retirement plans that Hope funds directly from her paycheck

Hope's contribution to her RETIREMENT plan...

• is a post-tax contribution on which she pays federal income taxes

• is pre-tax and therefore not included in federal income taxes

• is a contribution to her Social Security

• is taxed at a rate of 15%

What was the TOTAL amount deducted from Hope's latest paycheck?

• $90.00

• $284.79

• $315.21

• $600.00